On 25 August 2026 the Ministry of Finance issued Ministerial Decision No. 133 of 2026, and it answered the one question every in-scope group had been asking since Cabinet Decision No. 142 of 2024 landed: who actually files the Pillar Two Information Return in the UAE. The answer is not “the group”. It is each UAE entity, one by one, unless somebody is formally appointed to file on their behalf.
That distinction is where the compliance cost sits, and it is the part most summaries have skipped.
What Ministerial Decision No. 133 of 2026 actually says
The Decision sits under Cabinet Decision No. 142 of 2024, the law that imposed the UAE Top-up Tax on multinational enterprise groups with consolidated revenue of EUR 750 million or more in at least two of the four fiscal years immediately preceding the year tested. It applies to fiscal years starting on or after 1 January 2025, so the first affected year for a December year end group is FY2025, already closed.
Three categories of entity must file a Pillar Two Information Return with the Federal Tax Authority:
- Each Constituent Entity located in the UAE, excluding any Investment Entity.
- Each Joint Venture and JV Subsidiary located in the UAE.
- Each Stateless Constituent Entity that is a Reverse Hybrid Entity created under UAE law.
The Decision also permits the return to be filed by a Designated Local Entity on behalf of the others. That permission is the whole point. Read it the other way around: if no Designated Local Entity is appointed, a group with eleven UAE companies has eleven separate filing obligations, each with its own deadline and its own penalty exposure.
The obligation map by entity type
| Entity in the UAE | Files a Pillar Two Information Return? | Practical note |
|---|---|---|
| Constituent Entity (operating company, holdco, branch treated as a CE) | Yes | The default filer. Can be covered by a Designated Local Entity. |
| Investment Entity | No | Carved out by name in the Decision. Still counts for the group’s ETR computation. |
| Joint Venture | Yes | Catches 50/50 vehicles that groups routinely treat as “outside the group” for reporting. |
| JV Subsidiary | Yes | Downstream JV entities are named separately, not swept up by the JV above them. |
| Stateless Reverse Hybrid Entity formed under UAE law | Yes | Narrow, but if you have one it files in its own right. |
| Qualifying Free Zone Person inside an in-scope group | Yes, as a Constituent Entity | 0% free zone status does not remove the filing obligation. See the worked example below. |
The dates that matter, and the one people miss
There are two clocks running, and they are set by different instruments.
Registration is governed by FTA Decision No. 12 of 2026, issued 16 July 2026. An in-scope entity must apply to register for Top-up Tax within seven months of the end of the first fiscal year in which it falls in scope. Where that fiscal year ended before 30 April 2026, the deadline is pushed to 30 November 2026. For a 31 December 2025 year end, that is the operative date, and it is roughly three months away.
Filing runs on the GloBE timetable: the Pillar Two Information Return is due 15 months after the last day of the reporting fiscal year, extended to 18 months for the transition year. A 31 December 2025 fiscal year therefore has a return deadline of 30 June 2027.
Here is what practitioners get wrong. Groups read “18 months”, calendar the June 2027 date, then discover in November that they have already blown a registration deadline that had nothing to do with the return. Registration and filing are not the same obligation, they sit in different decisions, and the earlier one bites first. FTA Decision No. 12 of 2026 also blocks deregistration until every Top-up Tax liability and penalty is settled and every return is filed, so a group exiting after a disposal cannot simply file a deregistration form and walk away.
Decision flow
- If your group’s consolidated revenue hit EUR 750 million in at least two of FY2021 to FY2024, then FY2025 is an in-scope fiscal year and you register.
- If your FY2025 ended before 30 April 2026, then your registration deadline is 30 November 2026, not seven months from year end.
- If you have more than one UAE entity, then appoint a Designated Local Entity in writing before you start filing, or accept a separate return per entity.
- If you hold a UAE joint venture or JV subsidiary, then add it to the filing list even though it sits outside consolidation for other purposes.
- If an entity is an Investment Entity, then it does not file, but its numbers still feed the jurisdictional effective tax rate.
Worked example: why 0% does not save you
Take a European headed group with three UAE entities, one of them a Qualifying Free Zone Person taxed at 0% and two mainland companies taxed at 9% under Federal Decree-Law No. 47 of 2022. Fiscal year 2025, all figures for the UAE jurisdiction as a whole:
- GloBE Income: AED 200,000,000
- Adjusted Covered Taxes: AED 15,000,000
- Eligible payroll costs: AED 40,000,000
- Eligible tangible assets: AED 60,000,000
The computation runs as follows:
- Jurisdictional ETR = 15,000,000 / 200,000,000 = 7.5%
- Top-up percentage = 15% minus 7.5% = 7.5%
- Substance-based income exclusion, at the FY2025 transition rates of 9.6% on payroll and 7.6% on tangible assets: (40,000,000 x 9.6%) + (60,000,000 x 7.6%) = 3,840,000 + 4,560,000 = AED 8,400,000
- Excess profit = 200,000,000 minus 8,400,000 = AED 191,600,000
- Top-up Tax = 7.5% x 191,600,000 = AED 14,370,000
The free zone entity contributed nothing to the numerator of the ETR and everything to the denominator. Its 0% rate is what dragged the jurisdiction to 7.5% and created a top-up bill of AED 14.37 million, collected in the UAE rather than abroad. Groups that structured around Qualifying Free Zone Person status for the corporate tax regime need to model it again under Pillar Two, because the two regimes pull in opposite directions above EUR 750 million.
Note also that the substance rates fall each year: 9.4% and 7.4% for fiscal years beginning in 2026, declining to 5% and 5% by 2033. The same fact pattern gets more expensive over time, not less.
Penalties and the transitional relief
For fiscal years beginning on or before 31 December 2026, and not including a fiscal year ending after 30 June 2028, no penalty applies in connection with the Top-up Tax Return or the Pillar Two Information Return where the FTA is satisfied the group took reasonable measures to apply the rules correctly. That is real protection, and it is also narrower than it reads.
It does not cover late payment of an actual Top-up Tax liability. It does not cover late registration, which falls back on the corporate tax penalty regime in Cabinet Decision No. 75 of 2023 as amended by Cabinet Decision No. 10 of 2024: AED 10,000 for late tax registration, plus AED 500 per month for the first twelve months of a late return and AED 1,000 per month thereafter. And “reasonable measures” is an evidential standard. A group that cannot show its working papers, its data sourcing and its documented positions is not obviously inside the relief.
What to do before 30 November 2026
- Confirm the threshold test against consolidated financial statements for FY2021 to FY2024, in EUR at the correct conversion, not an approximation.
- List every UAE entity and classify it: Constituent Entity, Investment Entity, Joint Venture, JV Subsidiary. The classification decides the filing list.
- Appoint a Designated Local Entity and document the appointment. This is the single highest-return decision in the whole exercise.
- Register on EmaraTax for Top-up Tax by the deadline that applies to your year end.
- Build the data set now. GloBE income adjustments, covered taxes, payroll and tangible asset registers by entity. This is the work that takes months, not the form.
- Reconcile against your corporate tax positions, particularly free zone elections and related party pricing.
How Harrison & Morgan helps
We run Pillar Two readiness for UAE groups through our Corporate Tax Advisory practice: threshold testing, entity classification, Designated Local Entity structuring, registration and the GloBE data build. Our Transfer Pricing team handles the related party positions that feed covered taxes, and our Audit & Assurance team provides the financial statement basis the computation depends on. If your corporate tax filings are still being tidied, start with our guide to filing your first UAE corporate tax return on EmaraTax.
Not sure whether your group is in scope, or who should be filing? Book a consultation and we will run the classification with you.
Frequently asked questions
Who must file the Pillar Two Information Return in the UAE?
Under Ministerial Decision No. 133 of 2026, each Constituent Entity located in the UAE other than an Investment Entity, each Joint Venture and JV Subsidiary located in the UAE, and each Stateless Constituent Entity that is a Reverse Hybrid Entity created under UAE law. A Designated Local Entity may file on their behalf.
When is the UAE Pillar Two Information Return due?
15 months after the last day of the reporting fiscal year, extended to 18 months for the transition year. For a fiscal year ending 31 December 2025, that is 30 June 2027. Registration is a separate and earlier deadline.
What is the deadline to register for UAE Top-up Tax?
FTA Decision No. 12 of 2026 requires registration within seven months of the end of the first fiscal year in which the entity falls in scope. Where that fiscal year ended before 30 April 2026, the deadline is 30 November 2026.
Does a Qualifying Free Zone Person have to file?
Yes, if it is a Constituent Entity of an in-scope MNE group. Its 0% corporate tax rate does not remove the obligation, and in practice it lowers the jurisdictional effective tax rate and increases the top-up tax payable in the UAE.
Are there penalties for getting the first Pillar Two filings wrong?
For fiscal years beginning on or before 31 December 2026, and not including a fiscal year ending after 30 June 2028, no penalty applies to the Top-up Tax Return or Pillar Two Information Return where the FTA accepts the group took reasonable measures. The relief does not cover late payment of top-up tax, and late registration is penalised at AED 10,000 under Cabinet Decision No. 75 of 2023 as amended.
Do Investment Entities file a Pillar Two Information Return?
No. Ministerial Decision No. 133 of 2026 expressly excludes Investment Entities from the filing requirement. Their results still form part of the jurisdictional effective tax rate computation.
About the author. Prepared by the advisory team at Harrison & Morgan Business Advisory, led by CA Mohammed Rinshad P R. General information only, accurate to the best of our knowledge as at 1 September 2026. Pillar Two rules are detailed and fact specific. Verify against Cabinet Decision No. 142 of 2024, Ministerial Decision No. 133 of 2026 and current FTA guidance before acting.